Defense manufacturing: a crisis in the making.

• Author: Farrell, Lawrence P., Jr.
• Position: PRESIDENT'SPERSPECTIVE

Defense manufacturing is like the weather. Everyone talks about it, but no one does anything.

This may seem like an exaggeration, but it is not, especially when defense manufacturing issues are coupled with manufacturing concerns writ large. In fact, it is almost impossible to examine the defense industrial base without including the issues that affect overall manufacturing in the United States. One may thus view manufacturing in the larger context as a national security issue, with defense manufacturing being a large component therein.

A recent Defense Science Board Report titled, "Creating a National Security Industrial Base for the 21st Century: An Action Plan to Address the Coming Crisis," concluded that Defense Department policies actually impede the transition to an affordable military force for the 21st century. Current policies don't facilitate development or deployment of affordable, innovative systems. Government acquisition policies, the study said, will not produce the required competitive, responsive, efficient and innovative industrial base.

The NDIA Manufacturing Division has identified six issues that demand attention.

The first issue is the need to recognize that U.S. firms now have incentives to manufacture domestically and keep jobs at home. High U.S. productivity rates and improvements in advanced manufacturing technology--coupled with the increasing costs of transportation--provide strong arguments against offshore manufacturing.

Next is the issue of foreign and domestic environmental policies. An NDIA White Paper, "Maintaining a Viable Defense Industrial Base," lays out the dangers of global manufacturing standards, such as the elimination of lead-based solder and hexavalent chromium corrosion coatings. In the case of solder, the substitute process is much less reliable. Also, the United States is increasingly unable to obtain replacement materials and parts. The solution demands focused investment in the development of alternative materials that offer performance equal to or better than the ones replaced.

Unstable budgets impede industry's ability to plan and budget. Uncertainty creates risks for contractors. The inability to see predictable, reliable funding streams prohibits business case analysis for investment decisions and work force stability. If funding projections are not predictable, industry will opt for lower risk approaches. Skill development and technology investment will suffer as a result.

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